Economic fallout from the mass exodus of Cambodian migrant workers

Cambodian migrant workers stand in a truck as they arrive from Thailand at a border gate in Poipet, Cambodia last month. Pic: AP.

On June 20, IOM stated that 225,000 Cambodian migrant workers had left Thailand. Hun Sen stated on June 26 that at least 250,000 had left. Thai figures are much lower than this, but this is because they don’t count all arrivals and departures at some border crossings so it seems like the number of Cambodian workers who left was in excess of 200,000 and likely closer to 250,000.

NOTE: This post will focus on the fall-out on the Thai side, but it cannot be underestimated that the return of around 250,000 people has caused problems in Cambodia (this is more than one percent of the Cambodian population) and the exodus was so quick that it has no doubt caused political problems in Cambodia, as there will not be enough jobs for all the people. It has forced Hun Sen to cooperate with the junta. (Veera’s release?).* Nevertheless, this is a blog that focuses on Thailand so this post will do so as well.

“If the exodus continues, the construction industry will be hit hard during the latter half of the year when the economic conditions are expected to improve,” said Somboon Weerapakorn, an executive at Westcon, a Bangkok-based construction company.

Suchart Chantaranakaracha, vice chairman of the business group Federation of Thai Industries, said he expects the workers will return.

“With Thailand as a developing country that can offer more jobs than neighboring countries, I believe migrant labor will soon return, providing that the clarification on the crackdown rumors is effectively communicated to them,” Mr. Suchart said

With the exodus, the Thai property industry is now coming to terms with this short-term loss of manpower.

But Thailand’s former finance minister worries about a greater impact on the economy.

Thirachai Phuvanatnarunubala said: “Even though the amount of labour cost involved with the Cambodian workers in this respect is only a tiny amount, the problem is… when this has effect on stalling the progress of construction projects.”

As many as 70 percent of the workers involved in loading grain at warehouses and moving it to vessels have left the country, Chookiat Ophaswongse, the association’s honorary president, said by phone from Bangkok yesterday. That could delay deliveries by as much as three weeks, he said.

In Rayong province, around 200 kilometres (125 miles) from the Thai-Cambodian border, factories have cut production after losing many of their Cambodian workers, said Sanguan Seangwongkij, vice chairman of the association of rubberwood operators in the region.

“Many of the factories in my group have had to slow down production because of an up to 30 per cent shortage of workers,” he said, adding it was “damaging foreign confidence” in the sector.

The factories, which process old rubber trees to make furniture, rely upon Cambodian labour but also hire workers from Myanmar, he explained.

BP: While initial reports pushed on the Thai side that Cambodians were returning was rather comical – a couple hundred a day were returning while ignoring a couple thousand a day were still leaving – with Cambodia lowering passport costs and new processing centres on the Thai side, there are more recent reports that as of July, around 1,000 Cambodians a day are now returning to Thailand. To put this in perspective though, and assuming simply for this exercise that no further Cambodians were to leave, at 1,000 a day it would take 250 days for all the Cambodian workers who left to return. That is a long time.